In the wake of signs of US-North Korea and inter-Korean thaws, spearheading the latest rally of South Korean markets were stocks that previously had business ties with North Korea effectively severed.

(Yonhap)

These firms, locally dubbed “inter-Korean business cooperation-themed stocks,” had either operated production facilities at Kaesong industrial park, been involved in joint efforts to build cultural parks at Mount Kumkang in the North or the Korean Demilitarized Zone, or been seen as likely to provide North Korea with infrastructure including railroads, power lines and pipes.

The heightened tensions surrounding North Korea‘s nuclear warhead development and armed conflicts between the two Koreas for years have left many of the firms largely out of the spotlight, especially in the wake of Kaesong industrial park shutdown in 2016, with many seeing a decline in net income or recording net loss last year.

Showing an immediate breakthrough performance on the local markets were firms like parts-maker Jaeyoung Solutec, jewelry firm J.Estina and fashion line In The F, which had production lines at the former joint industrial complex in North Korea. Jaeyoung Solutec and J.Estina, listed on the second-tier Kosdaq market, surged 55.6 percent and 36.8 percent, respectively, compared to a week prior as of Friday and hit the price ceiling Wednesday. In the F, trading on the top-tier Kospi, had risen 40.1 percent over the past five trading days as of Friday.

Formerly engaged in business cooperation in North Korea that was suspended in 2016, Hyundai Merchant Marine saw its share price rise 3.91 percent during the previous week. Meanwhile, Hyundai Elevator, the largest shareholder of another firm involved in inter-Korean business cooperation, Hyundai Asan, jumped 36.9 percent.

Analysts noted the signs of North Korea’s denuclearization on the Korean Peninsula had a selective impact on the market, rather than on the whole.

“The announcement of an inter-Korean summit buoyed selected stocks related to inter-Korean business cooperation, but the market (after the announcement) did not have a dramatic response, falling short of pushing upward the market index as a whole,” wrote Kim Min-gyu, an analyst at KB Securities in a Friday note.